Economics of Estrus Synchronization and Artificial Insemination Dr

Economics of Estrus Synchronization and Artificial Insemination
Dr. Les Anderson and Paul Deaton
University of Kentucky
Introduction
Few beef producers would disagree that the genetic potential available for use in their herds via artificial insemination is greater than
that of most natural service sires. However, less than 10% of the beef cows in the United States are artificially inseminated each year
(NAHMS, 2000). Many reasons exist for the low rate of implementation of estrus synchronization and AI (ESAI) into beef cow-calf
operations. One reason is the extensive nature of beef production. Most cows are pastured in large acreages and the labor necessary
for handling the cows is too great. Additionally, many producers lack adequate facilities to enable safe and easy cattle handling. Beef
production is a minor enterprise on many farms. The income from the beef enterprise in most small and medium-sized operations is
secondary to other enterprises or to off-farm income. However, the primary reason for the limited inclusion of ESAI is economics.
Little information is available to aid producers in making decisions regarding return on investment and profitability when considering
using ESAI. Many producers may incorporate ESAI if it would improve their profitability both short- and long-term. This paper
examines the costs of pregnancy for both natural service and AI, the short-term returns on investment of AI and the long-term effects
of incorporating AI into a breeding system
Costs per Pregnancy
Few producers understand the costs associated with producing a pregnant female. Sandy Johnson and coworkers (2003) from Kansas
State University recently published an excellent article discussing the costs associated with pregnancy using either natural service or a
variety of estrus synchronization protocols. Table 1 illustrates the costs per pregnancy for bulls that range in price from $1,500 to
$3,000 and bull-to-cow ratios from 1:15 to 1:50. Assumptions of the model included use of the bull for 4 seasons; 10% death loss; 9%
interest rate; and a 94% pregnancy rate. Annual bull maintenance costs are variable and increasing the feed costs by $100 increased
cost per pregnancy from $2.22 to $7.41 for high and low bull-to-cow ratios, respectively. Costs per pregnancy ranged from $15.98 to
$90.51 depending predominantly upon the purchase price and bull-to-cow ratio. Certainly, the ability to identify bulls with a high
serving capacity could reduce costs associated with impregnating females.
Use of ESAI will alter cost per pregnancy. Producers can use a partial budget (Table 2) for enterprise analysis of ESAI.
Implementation of ESAI can increase returns by increasing the weaning weight of the calves (both age and genetic effects), altering
market price by increasing the uniformity of the calf crop, and improving cow productivity by enhancing the number of high-quality
replacement heifers. Alternatively, ESAI can reduce potential income because fewer bulls are available to sell as cull bulls. Estrus
synchronization and AI increases costs because of costs for synchronization products and supplies, labor, technician, and perhaps
facilities. However, ESAI can reduce costs by lowering the number of bulls needed for natural service and reducing the labor hours at
calving due to a more concentrated and predictable calving season.
Several factors affect the cost per pregnancy of an estrus synchronization and AI program. Conception rate to the AI influences the
cost per pregnancy (Table 3). As conception rate to AI increases, the cost of pregnancy of the system decreases. Cost per pregnancy
is also influenced by total labor hours associated with the ESAI system (Table 4), the cost of labor, and the cost of semen. If
pregnancy rate is held constant (Table 4), the cost per pregnancy of ESAI exceeds that of natural service especially for smaller herds.
However, if the costs are adjusted for the expected increase in weaning weight of the calves resulting from the ESAI, the cost of
pregnancy for Select Synch and MGA-PG is lower to produce a 500 pound equivalent weaned calf (cost per cwt of calf). The cost per
pregnancy of CO-Synch to produce a 500 pound equivalent calf was only $.51 per cwt higher than that of natural service. If
conception rate to AI increases to 60% (Table 5), then the cost per 500 pound equivalent calf is not different between CO-Synch and
natural service.
From these data it seems apparent that the costs of pregnancy are not significantly different between natural service and most ESAI
protocols. Of course, if labor is high, if semen costs are excessive, or if conception rate to the AI is low, the cost per pregnancy of
ESAI can dramatically increase.
Short-term Return on Investment
Little data can be found in the literature that examines the return on investment of incorporating estrus synchronization and AI.
Therefore, the following trial was designed to determine if implementation of estrus synchronization and AI is cost effective and
enhances net return. Crossbred postpartum cows (n = 351) were randomly assigned by age and calving date to one of two breeding
systems. Approximately two-thirds of the cows (n = 251) were subjected to an estrus synchronization protocol suitable for a fixedtime insemination (SYNC). On Day -9, cows were administered gonadotropin-releasing hormone (GnRH; 100 ug; Cystorelin¤,
Merial) and 7 days later were administered 25 mg of prostaglandin F2_ (PG; Lutalyse¤, Pharmacia & UpJohn, Kalamazoo, MI).
Cows were administered a second injection of GnRH and were artificially inseminated on Day 0. On Day 10, cows were exposed to
natural service for 50 days. Bull-to-cow ratio was 1:50 females in the SYNC group. The remaining cows (n = 100) were exposed to
natural service for 60 days (NAT). The bull-to-cow ratio in the NAT treatment was 1:25. The bull-to-cow ratio was different between
the SYNC and NAT groups because we anticipated that approximately one-half of the cows in the SYNC group would conceive to AI.
To verify date of conception, pregnancy was diagnosed on Day 90 using transrectal ultrasonography.
To determine return on investment, all costs associated with the estrus synchronization and AI were recorded and are summarized in
Table 6. Labor was determined by recording amount of time required to bring the cattle to the corral, work the cows and then return
them to the breeding pastures. Four laborers were used, three trips through the chute, and an hourly wage of $7.00 per hour. To
determine differences in revenue, calves were weighed at weaning and the differences in weight available to market were determined.
Calves from both treatments were given a value of $80 cwt.
Differences between treatments were determined using GLM procedures of SAS. Differences between treatments in proportional data
were determined using Chi Square analysis.
The results of this trial are shown in Table 7. More (P > .05) cows calved in the SYNC group than in the NAT group and more (P >
.05) cows calved in the first 30 days of the calving season in the SYNC versus the NAT treatment. The average date of calving was
earlier (P > .05) in the cows in SYNC than in the NAT group. The average weaning weight of calves was heavier (P > .05) from cows
in the SYNC than from those in the NAT group. The increase in percent calf crop weaned and weaning weight increased the pounds
of calf weaned per cow exposed by nearly 110 pounds.
Return on investment is shown in Table 8. Revenue increased by $99.62 in the SYNC group. This increased revenue was achieved
by investing $29.88 per cow. Therefore the return on investment for the estrus synchronization and AI was $69.74. This return does
not include savings associated with reduced bull costs. One-half the number of bulls was used per cow in SYNC group than in the
NAT group. If savings on bull purchases are included, the return on investment increases to $129 per cow. These short-term
increases in revenue are quite attractive, but the long-term effects of increasing cow productivity by retaining the heifers sired by
proven sires are not apparent.
Long-term Effects of Estrus Synchronization and AI
No data is available that addresses the long-term impact of estrus synchronization and AI in commercial beef cow-calf operations. A
trial was designed to examine the long-term effects of incorporating estrus synchronization and AI into a beef cow-calf operation. The
data were collected on a single cow-calf operation from 1991 to 2003. Data collected from 1991 to 2000 serve as the baseline or
control. During this time period, approximately 45 females (35-40 cows and 5-8 heifers) were exposed to a 60-day natural service
season. Two bulls were used each year. The breeding system used was a two-breed rotational system using Angus and Charolais
bulls. The average performance of this herd is illustrated in Table 9.
The breeding system was changed to determine the effects of estrus synchronization and AI. All females were subjected to an estrus
synchronization protocol suitable for fixed-time insemination (CO-Synch). Females were inseminated to bulls from maternally-
oriented breeds (Angus and Hereford). Charolais-cross cows were inseminated to the Angus sire and Angus-cross cows were
inseminated to Hereford bulls. Ten days after AI, cows were exposed to a 50-day natural service season. The natural service sire was
from a terminally-oriented breed (Charolais). Replacement heifers with AI-sires were retained. All calves sired by the terminallyoriented sire were marketed. This trial is in the third year of a ten year study. Data reported were analyzed using the Cow Herd
Appraisal System (CHAPS) and the Standardized Performance Analysis (SPA) software programs.
The results from the first two years of the trial are shown in Table 9. Incorporation of estrus synchronization and AI increased the
percentage of cows that calved, percent calf crop weaned, and the average weaning weight of the steer calves. These increases lead to
a marked improvement in pounds of calf weaned per cow exposed. The increases in production efficiency led to increased
profitability. Net profit per cow exposed to the bull doubled in the first year and was $20 per cow higher in 2002. We anticipate that
productivity and profitability will continue to increase as the AI-sired females enter the breeding herd.
Conclusions
Inclusion of estrus synchronization and AI is a profitable enterprise for commercial beef cow-calf operations. The short-term returns
on investment were approximately $70 per cow simply by increasing reproductive efficiency and thus the pounds of marketable calf.
Additional short-term increases in revenue exist if the producer retains ownership. Data from the Angus Association demonstrated
that the carcass value was $206 per head greater for sires from the top 10% than the bottom 10% for carcass value. Therefore, if the
calves produced from the herds used in the above trials were from sires that were only average and the bulls used for AI were in the
top 10% and the cattle were marketed on the grid, an additional $100-$125 per calf is profited. The key to capturing the greatest
potential profit is to utilize alternative marketing systems. However, even in a commodity market, inclusion of ESAI is a profitable
rather than costly venture.
Table 1. Cost per Pregnancy Using Natural Service
Purchase Price
1,500.00 1,700.00 2,000.00
Salvage Value
860.00
860.00
860.00
Summer Pasture
104.13
104.13
104.13
Crop Residue
7.50
7.50
7.50
Hay
90.61
90.61
90.61
Protein, mineral
25.00
25.00
25.00
Labor
50.00
50.00
50.00
Vet
21.00
21.00
21.00
Repairs
31.00
31.00
31.00
Misc.
7.00
7.00
7.00
Interest
15.13
15.13
15.13
2,300.00
860.00
104.13
7.50
90.61
25.00
50.00
21.00
31.00
7.00
15.13
2,500.00
860.00
104.13
7.50
90.61
25.00
50.00
21.00
31.00
7.00
15.13
3,000.00
860.00
104.13
7.50
90.61
25.00
50.00
21.00
31.00
7.00
15.13
Total Variable
351.37
351.37
351.37
351.37
Depreciation on Equipment
12.39
12.39
12.39
12.39
Depreciation on bull
160.00
210.00
285.00
360.00
Interest on bull
212.40
230.40
257.40
284.40
Death loss
15.00
17.00
20.00
23.00
Total Fixed
399.79
469.79
574.79
679.79
Total cost/year
751.16
821.16
926.16 1,013.16
Purchase Price
1,500.00 1,700.00 2,000.00 2,300.00
Cows
Exposed Per
Cost Per Pregnancy ($)
Year
15
53.27
58.24
65.69
73.13
20
39.96
43.68
49.26
54.85
25
31.96
34.94
39.41
43.88
30
26.64
29.12
32.84
36.57
35
22.83
24.96
28.15
31.34
40
19.98
21.84
24.63
27.42
50
15.98
17.47
19.71
21.94
Reprinted with permission from Johnson et al. 2003
351.37
12.39
410.00
302.40
25.00
749.79
1,101.16
2,500.00
351.37
12.39
535.00
347.40
30.00
924.79
1,276.16
3,000.00
78.10
58.57
46.86
39.05
33.47
29.29
23.43
90.51
67.88
54.30
45.25
38.79
33.94
27.15
Table 2. Partial Budget for Synchronization of Estrus Synchronization Plus AI
Budget
Source
Budget
Source
Effect
Effect
Increased
Heavier calves (earlier average birth
Decreased
Fewer cull bulls to sell
Returns
date)
Returns
Improved genetics (calves and
replacement females)
Uniformity of calf crop (fewer sires
could be used, total breeding season
could be shorter)
Decreased
Fewer bulls to purchase and maintain
Increased
Planning and management for
costs
Less labor for more concentrated
costs
synchronization of estrus and AI
calving season
Synchronization products and
More predictable calving ease
supplies
Labor
Improved facilities?
Reprinted with permission from Johnson et al. 2003
Table 3. Effect of Changing Pregnancy Rate on Breeding Cost per Pregnant Female in a
Select Synch Protocol
AI
No. of bulls
Breeding
pregnancy
for natural
cost ($) per
Calving
Proportion % of total cost attributed
herd size
rate (%)
service
pregnancy
to:
Bulls Semen Labor Treatments
100
75
1
42.06
20
37
19
15
100
55
2
46.08
37
24
18
14
100
48
3
53.01
48
19
15
12
300
65
5
40.90
35
33
11
16
300
55
6
41.49
41
27
11
15
Adapted with permission from Johnson et al. 2003
Table 4. Breeding System Costs and 500lb Equivalent Weaned Calf Breeding Cost per cwt
Days
Preg.
Total Labor
Cost ($) per
Worked
Rate (%)
Hours
No. of Bulls
pregnancy
Herd Size
Herd Size
Herd Size
30 100 300 30 100 300 30
100
300
System
Natural
Service
2
4
12 56
34
34
Select
Synch
9
50
45 82
142 1
2
6
67
45
40
MGA +
PGF
6
50
37 67
116 1
2
6
60
39
35
CO-Synch
3
50
26 47
82
1
2
6
70
51
48
a
Diff = difference between natural service and breeding system, $/cwt
Adapted with permission from Johnson et al. 2003
500 lb. equivalent weaned calf breeding cost ($)
per cwt.
Herd Size
30
Diffa
100
Diffa
300
Diffa
12.91
-
7.79
-
7.79
-
12.75
0.16
7.74
0.05
6.68
1.11
11.20
13.41
1.71
(0.51)
6.47
9.04
1.32
(1.25)
5.56
8.32
2.23
(0.53)
Table 5. Breeding System Costs ($) and 500 lb Equivalent Weaned Calf Breeding Cost ($) per Cwt at Various AI Pregnancy Rates
Days
Preg. Rate
Cost ($) per
500 lb. equivalent weaned calf breeding cost ($) per
Worked
(%)
No. of Bulls
pregnancy
cwt.
Herd Size
Herd Size
Herd Size
System
30 100 300 30
100
300
30
Diffa
100
Diffa
300
Diffa
Natural
Service
2
4
12
56
34
34
12.91
7.79
7.79
3
40
1
3
7
70
59
50
13.93
(1.02)
11.50
(3.71)
9.48
1.11
3
50
1
2
6
70
51
48
13.41
(0.51)
9.04
(1.25)
8.32
(0.53)
CO-Synch
3
60
1
2
5
70
51
45
12.90
0.01
8.53
(0.74)
7.16
0.63
6
40
1
3
7
58
46
36
11.20
1.71
8.41
(0.63)
6.21
1.58
6
50
1
2
6
60
39
35
11.20
1.71
6.47
1.32
5.56
2.23
MGA/PGF
6
60
1
2
5
62
42
35
11.20
1.71
6.46
1.33
4.91
2.88
9
40
1
3
7
65
51
41
12.75
0.16
9.68
(1.90)
7.33
0.45
9
50
1
2
6
67
45
40
12.75
0.16
7.74
0.05
6.68
1.11
9
60
1
2
5
69
47
40
12.75
0.16
7.73
0.06
6.03
1.76
Select Synch
a
Diff = difference between natural service and breeding system, $/cwt
Adapted with permission from Johnson et al. 2003
Table 6. Cost of AI
Item
Cost per cow
GnRH
$4.00
Prostaglandin
$4.00
Technician
$5.00
Semen
$10.00
Labora
$2.88
Total
$29.88
a
8.6 hours X 3 working days X 4 workers X $7.00 per hour for 251 cows
Table 7. Results of Short-Term ESAI Trial
SYNC
Cows
251
Calving Rate
90%
% Calving 1st 30 days
85%
Mean Julian date of calving
74 – .4
% calf crop weaned
88%
Weaning age
210 – 9
Weaning Weight
576.9 – 18.1
Lbs. calf weaned/cow exposed
507.9
NAT
100
81%
62%
84 – .7
79%
200 – 12
504.8 – 21.2
398.4
Diff
9%
23%
10d
9%
10 d
72.6 lbs
109.5 lbs
Table 8. Increased Revenues from ESAI
Weaning Weight
% Calf crop
Revenue
72.6 poundsx $80 cwt =
$58.08
9% more calves x $80 cwt = $41.54
Total Revenue
$99.62
Return on Investment
$99.62 — 29.88 =
$69.74
Table 9. Effects of ESAI on Production Efficiency and Profitability in a Medium-Sized Herd
Avg from 1991
to 2000
2001
2002
No. of females exposed
45
45
44
Calving Rate Percentage
(# Cows Calving/# Cows Exposed)
82 %
95%
93%
% Calf Crop Weaned
74.5%
91%
86%
WW Average (pounds)
Steers
Heifers
Sale Weighta
525
484
542
514
556
482
Steers
554
588
600
Steer Sale Price (per cwt)
$77.00
$88.00
$83.00
Lbs of calf weaned per cow exposed
381.2
481.4
448.2
# Cows Sold
5
9
6
Cash Cow Costs
$235.38
$285.82
$292.26
Net Profit per Cow Exposed
(Cash sales per cow- cow cost)
$57.75
$116.62
$76.83
a
Calves were backgrounded for approximately 25 days prior to marketing